Louisiana Governor Jeff Landry recently opened a special legislative session to discuss tax reform in the state. One notable proposal introduced by Rep. Roger Wilder seeks to increase the sports betting tax rate from 15% to 51%, making it one of the highest in the country. The bill would also disallow operators from deducting promotional play credits from their taxable revenue.
If passed, this bill would generate potentially millions more in tax revenue for Louisiana, but industry experts warn that operators may find it financially unsustainable and leave the state. This would result in less handle, gross sports betting revenue, and ultimately less tax revenue overall.
Jeff Ifrah, co-founder of iDEA, an association focused on growing jobs and expanding online interactive entertainment businesses, expressed concern about the tax increase. He suggested that Louisiana should consider policies to stimulate economic growth, such as legalizing iGaming, rather than imposing such a drastic tax hike on the sports betting industry.
The bill is currently in the ways and means committee and will require a two-thirds majority in the House of Representatives and Senate to pass. A hearing is scheduled for November 13th. This move reflects a trend in states reassessing their sports betting tax rates, with Illinois recently implementing a tiered system. Louisiana’s proposed flat tax rate of 51% would mark a significant shift in the state’s tax landscape for sports betting operators.
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